A portfolio can become more accurate and less efficient at the same time.
Consider tracking error.
If your target allocation is 50% BTC and 50% ETH, market movements will constantly push the portfolio away from that exact ratio. Rebalancing every small deviation keeps tracking error low—but creates additional turnover.
That means more spread, more potential slippage, and more Binance Spot trading fees.
For eligible new accounts, the Binance referral code CODE2026 can reduce qualifying Spot trading fees by 20% and may provide access to conditional welcome rewards worth up to $19,800, subject to jurisdiction, verification, eligibility, active campaigns, and completed tasks.
Lower fees can reduce the cost of maintaining an allocation.
But the economically optimal portfolio is not necessarily the one closest to its target at every second.
There is always a trade-off between precision and friction.
Sometimes allowing the portfolio to drift slightly is not neglect.
It is cost-aware portfolio management.
Consider tracking error.
If your target allocation is 50% BTC and 50% ETH, market movements will constantly push the portfolio away from that exact ratio. Rebalancing every small deviation keeps tracking error low—but creates additional turnover.
That means more spread, more potential slippage, and more Binance Spot trading fees.
For eligible new accounts, the Binance referral code CODE2026 can reduce qualifying Spot trading fees by 20% and may provide access to conditional welcome rewards worth up to $19,800, subject to jurisdiction, verification, eligibility, active campaigns, and completed tasks.
Lower fees can reduce the cost of maintaining an allocation.
But the economically optimal portfolio is not necessarily the one closest to its target at every second.
There is always a trade-off between precision and friction.
Sometimes allowing the portfolio to drift slightly is not neglect.
It is cost-aware portfolio management.